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9/20/2004
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Tapscott Emphasizes 'Business Webs,' The Value Of IT, And Innovation

Speaking at the InformationWeek Fall Conference, Don Tapscott articulates his vision of business webs, how their success depends on the strategic use of technology, and how companies with such webs can gain competitive advantage.

Don Tapscott, co-author of The Naked Corporation and president of New Paradigm Learning Corp., took the stage Tuesday morning at InformationWeek's Fall Conference in Rancho Mirage, Calif., and spread the message about "business webs," which he described as a key way to gain business advantages.

Business webs come in a number of forms, from open markets like eBay, to aggregates or exchanges such as the B-to-B auto-industry exchange Covisint, to tightly organized value chains of manufacturers and outsourcers, to self-organizing alliances, like the network of kids and adults building and sharing Lego Mindstorms robotics apps. What they have in common is what matters: Their ability to use IT to create killer businesses.

"The vertically integrated corporation is unbundling," he said. Corporate boundaries are increasingly porous, extending to suppliers, customers, and other partners. Business webs offer the promise of greater innovation, being able to draw on sources that don't or won't work within the four walls of companies, and greater speed.

It's all happening just in time, too, given that "the metabolism of business is speeding up--you need to keep innovating," Tapscott said. Among their other attributes, business webs engender IT-enabled relationships, IT-embedded products, increased intelligence, and strategic controls.

Tapscott repeatedly pointed out that he was making the anti-Nicholas Carr argument; Carr authored the Harvard Business Review's "IT Doesn't Matter" essay.

Tapscott used the example of embedding technology in everyday products, such as a hotel door that can monitor when it's been accessed and by whom, to highlight his differences with Carr.

Tapscott recounted how, on a panel with Carr, he noted this as a competitive business advantage, enabled by IT. Carr, he said, shot back that the very example proved his own point that IT doesn't matter, because the first hotel that adopted this technology was very soon followed by others, and any competitive advantage it may have had was short-lived. Tapscott asserted the competitive advantage wasn't the hotel's, but rather the company's that brought the door technology to market first and, in so doing, was able to gain market share.

Companies that aren't thinking about how their businesses can adapt to new business web models had better start, and soon. The next generation will be the first kids to grow up "bathed in bits," collaborating online and analyzing what they're reading there. Responding to the needs and demands of these customers is going to require killer businesses that can offer choices and customization, quickly respond to changing demands, and relate to the generation's "try before they buy" mentality. "This is the age of competitive advantage," Tapscott said, "and the killer business will be central to that."

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